December 20, 2006

Call The Waaahmbulance!

"My health insurer has just notified me, in a brief form letter, that my monthly premiums are to rise from $472.33 to $857.00 on January 1st. That's an increase of 81 percent. ***E*I*G*H*T*Y*-*O*N*E* *P*E*R*C*E*N*T*** Can they do that? I called them. They sound pretty confident they can. Ye gods!"

"You see, John, there is this thing called the "market." People who want to buy health insurance--that's you, John--look for people who want to sell health insurance, and when you find one and agree on a price you make a "transaction." This is a voluntary exchange. Both sides to do it. The health insurer has just told a customer that they want to charge you not $5,668 for next year but rather $10,284. If the customer doesn't like that price, the customer should look for another health insurer.

Now we liberals have lots of reasons and arguments for why we would not expect free markets in health insurance to work very well, and Derbyshire has just encountered one of them: it looks as if his particular health plan is entering an adverse-selection death spiral."

Me: When Derbyshire asks "Can they do that?", what sort of restrictions does he think might make the answer "no, they can't"? Is he hoping for government intervention? The hand of God? Is he under the misapprehension that something prevents price increases that are unduly sudden or onerous?

Seriously: John Derbyshire writes for one of the most respected conservative magazines out there. He advocates free markets. Was he somehow unaware that his own principles leave him with no grounds for complaint when something like this happens? Or that all sorts of other people face this sort of thing all the time?

Maybe he'll cancel his insurance and then get sick, in which case he can write all sorts of breathless Corner posts asking: can they really charge me hundreds of thousands of dollars to save my life? Can my prescription medications -- the ones I need in order to keep my illness under control -- really cost hundreds of dollars a month? I called the pharmaceutical company, and they seem pretty sure that they can. Ye Gods!

One can only imagine what he'd write if he were trying to manage all these costs while making the minimum wage.

Later, Derbyshire tries to put a conservative spin on this. A reader writes that health insurance needs reform, and he replies:

"Can't really talk about this, I'm still in shock. But yes, anyone who says right now that our entire health-care financing system is nuts to the fourth power, won't be getting any argument from me. And from a social-libertarian point of view, the thing is pernicious, as it strongly discourages individuality & enterprise. As is the case with the tax code, the message you get loud and clear is that the govt. wants us all to be employees so we can be tax-farmed more easily. Strike out on your own, step off that corporate hamster-wheel, and you get socked with sudden 81 percent hikes in your health-care premiums. Hoo-ee."

As Derbyshire ought to know, the fact that health insurance is linked to employment is not a result of deliberate government design, but of a peculiar historical accident. It remains in place because of a political stalemate: though most people who study it believe that our health insurance system is broken, so far it has been a lot easier to shoot down any given proposal for reform than to enact one. Again, though, this is not something that a conservative who writes for the National Review ought to be discovering now, for the very first time.

Liberals have been saying for ages that the present system of health insurance isn't just unfair; it's also deeply inefficient. And this is not just because it creates huge administrative costs and an incentive for insurance companies to expend resources trying to remove sick people from their rolls. It's because it does discourage people both from striking out on their own and from switching to what they would otherwise regard as better jobs, if switching jobs would require that they sacrifice their health insurance. Moreover, insofar as people who don't have health insurance suffer from untreated illnesses, it prevents them from being as productive and successful as they would otherwise be. And yet, somehow, our plans have never gotten enacted into law.

Now: why might that be? Who could have been standing in the way of reforming a system that "strongly discourages individuality & enterprise"? Why: it's conservatives! Conservatives like John Derbyshire! Who'da thunk it?

Comments

I'm on disability, the yearly benefit total which barely breaks five digits.

My medications cost me several hundred dollars per month and allow me to be moderately functional -- that is, shower every 2-3 days, prepare my meals and generally pick up after myself, and lie here reading blogs when I'm in too much pain to do anything else. With the medication, that's about all my energy reserve allows for. Without, try decreasing the shower frequency to every 10-14 days, etc.

Obviously this leaves little room for expenses such as, you know, rent. Food.

I am engaged, and my fiance has a good enough income that we are able to live comfortably enough. But I lose the disability after the wedding. His insurance has a one year preexisting condition exclusion period, wherein we pay the premium (my portion is double his -- so the total is then tripled) while I receive no coverage, and so we are paying several hundred dollars per month to an insurance company that is doing nothing for me, and still have to pay for all those medications. I will not qualify for (for example) Pfizer's Connection to Care because I will, actually, have insurance, although that insurance won't pay anything.

But at least it's only a year. Most private insurances reject me outright.

Now, the fiance makes a comfortable income, as I said. But not enough to cover that. So after we simultaneously lose hundreds of dollars in income and add hundreds of dollars in expenses -- we are assuredly going into debt. We have both been responsible thus far and have good credit, so I guess the silver lining is that we're sure to have as much credit extended to us as we'll need -- but repayment is going to be a [female dog].

Derbyshire writes: Strike out on your own, step off that corporate hamster-wheel, and you get socked with sudden 81 percent hikes in your health-care premiums.

Yep. That's why the NHS is such a blessing. Socialist health care: the best protection of small-scale free enterprise. I wonder if this is a genuine change of heart from Derbyshire, or if it's just a Dick Cheney gay marriage moment?

I meant the rule that conservatives only tend to register that conservative policies are unfair and discriminatory when such policies have a direct impact on them or on people they love. Dick Cheney is a liberal about gay marriage because he loves both his daughters: it's the only nice thing I know about him.

I pray that he has no preexisting conditions other than that festering, malignant bolus of stupidity lodged in his chutzpah gland. When they were rationing the stupidity, how come he received so much of it? That's not fair.

I think we should wait and see before any taking any costly action. Have a drink, write your will and please, whatever you do, do NOT see me in the morning. And, grab your gown from the back, Mr. Derbyshire, so I don't have to look at your a--. That's not covered either.

Jes is quite right: national health care is a tremendous gift to the would-be entrepreneur, as well as a good disincentive for a lot of crime. Both of which help explain why it's unappealing to movement conservatism, which disapproves of potentially disruptive small business and likes having a helpless labor pool to exploit.

I would be deeply unsurprised to learn that Derbyshire had in fact never considered what this kind of thing means to real people like himself before. He'd be far from unique if he'd always held some reservations about the stories told by and about unreal people like the very poor and non-Anglo, and about the statistics presented that would seem to support claims that more direct government involvement in health care would be a good idea. After all, pundits learn how to deploy anti-statistical skepticism to their convenience, and part of being the wrong sort of person has always been a basic shiftiness about honor and decency. And if it it had ever afflicted a close friend of his, he could probably have dismissed it as bad luck or poor choices on an individual level.

So here we have a comfortably well-off middle-aged man discovering that all those wrong people were right about this. I will bet you, however, that in the end he finds some way to reassure himself that they're still wrong.

The only non-group policy I've heard of he could have been on at $472/month would be something from the National Association of the Self Employed. They had some bad publicity this year from clients who found out the hard way that their coverage was more than a little leaky.

So it could be not an adverse selection spiral, but a company that was changing their policy to actually provide insurance, not just the illusion of it.

Not only do I have zero sympathy for Derbyshire, I actually take great joy when conservative politicians or pundits or blog authors who find themselves hosed by the American healthcare system. It is they who continue to poison the debate about national healthcare and prevent solutions proven to work everywhere they are tried from being enacted.

If a conservative voter, on the other hand, found himself in this position, I might feel some sympathy.

This is similar to how I would feel maybe only the teensiest bit sad if Dick Cheney's daughter or her partner were ever denied insurance coverage, visitation rights, etc. because they lived in Virginia.

The time has long since passed for feeling sorry for conservatives who are victims of their own designs. The time now is to hammer them with reality so they understand that "policies have consequences", in the case of Republican policies, "bad consequences"

Hmm, I believe that Derbyshire just got exposed to the fact that when you divorce the cost of something from the person who gets the something, the person who gets the something often doesn't really appreciate how much it costs. That is true emotionally even if you thought you understood it intellectually.

What's your point, exactly, Sebastian? - We should our system to teach people to appreciate that healthcare costs a lot? Or am I missing something?

Every other country in the world with nationalized healthcare has lower overhead, universal coverage, better outcomes, better customer satisfaction and achieves this with lower spending as a percent of GDP.

Nationalizing health insurance has not led people (now "divorced" from the costs) in these countries to over-use their healthcare systems. In fact, the only increase usually seen is in people getting more preventative care, which lowers the long-term cost of caring for that problem as the expensive systemic issues are often averted when they're easy and cheap to fix.

Yes, each system has issues, but they pale in comparison to the ones the American system will never be able to overcome (for all the reasons people have spent countless hours trying to outline to you). Even the people who complain (to the pollsters) in the countries I mentioned specifically say they wouldn't give up their system for one like ours.

Do you have anything substantive (i.e. academic papers you can reference) to contradict the reams of evidence in favor of single-payer national healthcare? Or just an philosophical/moral aversion to "hiding" or "spreading" the costs of insurance out amongst everyone? Please then explain how you support the concept of insurance (auto, home, liability) at all.

Socialist health care: the best protection of small-scale free enterprise.

Ah, see, there's the explanation right there. Modern "conservatism" of the Derbyshire variety is very much opposed to that sort of thing. Large-scale free enterprise (I believe some folks call it "capital") is the only sort that needs protection.

In fairness though, what Sebastian said is relevant. Let's not discount the possibility that the US government could come up with a nationalized, but still thoroughly unsustainable system, simply because nationalized health care happens to be managed sensibly and efficiently elsewhere.

Hmm, I believe that Derbyshire just got exposed to the fact that when you divorce the cost of something from the person who gets the something, the person who gets the something often doesn't really appreciate how much it costs. That is true emotionally even if you thought you understood it intellectually.

I don't think this is exactly what he got exposed to. Consider (from Derbyshire):

Strike out on your own, step off that corporate hamster-wheel, and you get socked with sudden 81 percent hikes in your health-care premiums. Hoo-ee."

Sound like what he got exposed to is the fact that individual policies, for reasons of adverse selection, higher administrative costs, etc., are substantially more expensive than group policies. So the US health insurance market - the system he and his associates so vigorously defend - isn't exactly doing a great job.

It's true that the problem Sebastian describes doesn't go away under a national health insurance scheme, but others do.

"Let's not discount the possibility that the US government could come up with a nationalized, but still thoroughly unsustainable system, simply because nationalized health care happens to be managed sensibly and efficiently elsewhere."

The key problem for a US health care system (private or public) is that we absolutely, definitley, do not want to ration end of life care. Those last two or three weeks of costs are economically very noticeable. My grandmother probably had spent on her last two weeks of life more money than she earned throughout the entire previous years. We didn't have a good DNR order in place so she was kept alive far longer than was at helpful for anyone. She was deep in Alzheimer's (and I really hope they have a cure for that before it strikes one of my parents) and couldn't say no for herself. If it had gone on for months we could have done something, but in those initial weeks the costs were still enormous.

Lots of people wouldn't be willing to just let grandma die if they could keep her alive just a few more weeks.

I don't think that desire is going away just because we nationalize (or otherwise make public) health care. Americans just have a mentally unhealthy view of end-of-life. Politically that is going to get ugly.

Sebastian, why is this a "key problem"? We already ration that healthcare for all the people that are un insured, under insured or on any of the government or state programs.

I see what you mention as a potential problem for any healthcare system, anywhere in the world. And I fail to see how a single-payer nationalized healthcare system would actually make this problem worse, or harder to deal with.

If anything, having a single insurer would likely offer coverage so that no one has a not-quite terminally ill relative die just because they can't afford expensive diabetes or stroke prevention medication). And it might equalize what we "cover" for people at the end of life. It might require people shell out extra if they wanted indefinite care for their terminally ill elderly relatives, but so what?

"I see what you mention as a potential problem for any healthcare system, anywhere in the world. And I fail to see how a single-payer nationalized healthcare system would actually make this problem worse, or harder to deal with."

As for the first sentence, we have a different culture from anywhere in the rest of the world. That is why I suggested that it was a mentally unhealthy attitude.

As for the second problem, it depends on other possibilities. If people are paying for their own insurance, the cost becomes evident and they can make choices on that basis. If the cost is paid by 'the government' they can lobby for universal payment and avoid directly confronting the costs.

As evidenced by Derbyshire's post, the only "choice" people make when paying for their own insurance is to drop insurance when rates rise to the level of unaffordability. That or continue to pay and then declare bankruptcy after trying to "use" their healthcare. Are those choices what you mean by "directly confronting the costs"? As explained a billion times, healthcare doesn't work like a normal market, and people can't make the same kinds of "intelligent" decisions they might when compared even to other kinds of insurance (i.e. knowing your auto rates would go up is powerful motive to drive sensibly, but you can't prevent getting diabetes or cancer if its inherited, or breaking your leg from a fall at work).

Again, unless incompetently designed (i.e. by Republicans), a single-payer national healthcare system is well equipped to handle/deal with the kinds of cost control issues you discuss (see non-universal but US based programs like Medicare and the VA). This is just not that pernicious of a problem as you make it out to be.

Even if we were to provide universal "keep grandma alive beyond when it makes sense" end-of-life care, we could probably do it for an equal amount than we currently spend for our current piecemeal system if we had nationalized health insurance (as evidenced by the % of GDP we spend now vs % of GDP other countries spend on healthcare).

However, since we're talking in generalities and at the theoretical level, I'd argue that a nationalized healthcare system, payed for by individual and corporate taxes, would just as likely spark good debates about what exactly is the level of end-of-life care that the country is willing to pay for as a whole. And good debates about exactly which prescriptions should be covered - does everyone need the latest medicine if it's only better for 1% of the population?

Again, I simply fail to see how the existence of some non-sensible healthcare wishes/attitudes means that our current healthcare system is better equipped or that national healthcare would be worse off. Can you point to or offer any evidence to that point?

Does this mean anything beyond the truistic "Every culture is unique"?

(Cue chorus of:

"Everything Is Beautiful/
In Its Own Way . . ."

I leave it to others to find and link to the actual song.)

Admittedly, I come from an odd perspective (in American terms), in that I've spent my career studying cultures very different from ours, from which perspective American and European (and Canadian, Australian, and Kiwi) cultures are all pretty much of a muchness.

But seriously - what do you think there is about American culture that makes us intrinsically incapable of running a roughly equitable health care system, such as many other countries have?

(Excluding, arguendo, the complete incapacity of the current administration to do anything competently.)

If people are paying for their own insurance, the cost becomes evident and they can make choices on that basis.

Not sure I agree. I guess if policies are individually underwritten, and claims experience is taken into account, and users know the impact of their decisions on future premiums, and the impact is big enough to make difference to their decisions, then maybe sometimes.

But usually all that doesn't happen. If you are part of a group plan then, even if claims experience affects rates, your decisions are unlikely to have much effect by themselves.

Yes, excessive use can be a problem. But private insurance is not a particularly good solution. I've certainly seen excesses, but in a fairly ordinary employer plan.

"As evidenced by Derbyshire's post, the only "choice" people make when paying for their own insurance is to drop insurance when rates rise to the level of unaffordability. That or continue to pay and then declare bankruptcy after trying to "use" their healthcare. Are those choices what you mean by "directly confronting the costs"?"

That is because the market has become so ridiculously deformed by the employment/insurance link and by constant government tinkering.

"I simply fail to see how the existence of some non-sensible healthcare wishes/attitudes means that our current healthcare system is better equipped or that national healthcare would be worse off."

"Some non-sensible healthcare wishes/attitudes" is a rather dramatic understatement. Charles Manson had some ego issues.

My point, and this is as good a time to repeat it, is that national healthcare does not avoid the incentives which fuel high-cost end-of-life care: a divorce between paying the cost and incurring the cost.

"Again, unless incompetently designed (i.e. by Republicans), a single-payer national healthcare system is well equipped to handle/deal with the kinds of cost control issues you discuss (see non-universal but US based programs like Medicare and the VA)."

Why is it well equipped? Rather than making the decision on a cost basis, it will be made on a political valence--which is exactly what I talk about above.

"But seriously - what do you think there is about American culture that makes us intrinsically incapable of running a roughly equitable health care system, such as many other countries have?"

I already told you. "The key problem for a US health care system (private or public) is that we absolutely, definitley, do not want to ration end of life care." and "I don't think that desire is going away just because we nationalize (or otherwise make public) health care. Americans just have a mentally unhealthy view of end-of-life. Politically that is going to get ugly."

Do you disagree that Americans (on average) have a much less healthy approach toward the end-of-life experience than many.

we have a different culture from anywhere in the rest of the world

Wow. I mean, WOW.

Does this mean anything beyond the truistic "Every culture is unique"?

Did you somehow interpret my statement as an endorsement of that aspect of American culture?

I dispute Sebastian's assertion. I grant that there are Americans who wish unlimited spending without regard to the possibility of achieving useful or even measurable results as the end of life approaches. After all, we had enough Americans willing to vote for Bush 43 a second time to make his awarded victory seem semi-plausible. The potential for a significant fraction of the public to be mind-boggingly stupid is always worth taking into consideration.

But I know that my own father didn't wish for anything like that. I know that the Willamette National Cemetery has an entire section for the remains of those who chose cremation, and more people wanting hospice care than there are beds and staff available for them. I know that multiple states have had death-with-dignity laws passed, and then trampled on at the federal level.

I think that a lot of Americans are scared of dying helpless and in situations that have spun totally out of their control. A good campaign for health care reform could address those fears, and address the various facets of them in appropriate ways. The American people have been systematically lied to for decades about what a national health care system might be like, what it is like elsewhere, but that doesn't mean those lies can never be corrected.

Sebastian - Fine, the end-of-life care issues would persist into the implementation of nationalized health insurance. So what? So would the debates on abortion, birth control, stem cells, vaccination and obesity issues.

You keep claiming it's a "key problem" but what does that mean? Where's the evidence that it would cause our nationalized healthcare systems costs to exceed the current systems costs? Or that it would worsen existing healthcare spending? I think there's lots of evidence that universal healthcare would be cheaper and have less overhead, where's the counter-evidence?

It really appears you are stuck on the idea that government "intervention" in healthcare is the "problem" and that if we simply removed most regulations and everyone paid for their own healthcare the problems would go away. No matter how many times people point out the inelasticity of the healthcare market to you, and the counter-evidence around the world, you cling to this belief.

Are you content to let the perfect be the enemy of the very very good, forever?

I think y'all are missing the fact that this is the invisible hand of God, the Moral Terrorist. I don't know precisely what Derb has been up to, but he should think of this as a tap on the shoulder telling him to get things right in his life...

Seb: there are all sorts of ways in which a single-payer/single-insurer system is better equipped to deal with costs, ways that do not involve rationing. Single-payer/insurer systems, for instance, cut overhead by not having any way of shuffling the sick off of their rolls. They therefore have incentives to invest in preventive care that insurers who don't know how many of their customers will actually be getting health insurance from them in 20 years simply don't have. There are all sorts of efficiencies derived from reducing the fragmentation of the health insurance market.

The health care systems of other developed countries spend vastly less (per capita, and as a percentage of the overall system) on administration and overhead than we do. They also have better outcomes on pretty much anything you'd care to measure, so it's not as though that overhead is getting us better care. It's an artifact of our fragmented system, and the perverse incentives it creates.

Any health insurance system will protect the consumer from experiencing the costs of health care directly. That's the point of insurance. Most people prefer to have health insurance, since the costs of getting seriously ill are, for most people, ruinous. Unless you want people to be exposed to those ruinous costs -- unless, that is, you want to ban health insurance and let people confront the cost of getting, say, colon cancer directly, and too bad if, at 40, they've "only" managed to put a hundred thousand dollars away for a rainy day -- people will be divorced from those costs, just as I am now "divorced" from the costs of repairing my car if someone sideswipes it. That's insurance.

Derbyshire, as a person who has insurance, is shielded in that way. He is not, however, shielded from the costs of insurance, which is what he's complaining about.

I love the spectacle of someone who writes for the National Review not only complaining, but asking: "Can they do that?" Why yes, Mr. Derbyshire. We call this "the free market." Perhaps you've heard of it. Some people think that some of its potential effects should be ameliorated, especially when there's ample evidence that the "market" in question is chock full of market failures in any case. You (JD, not SH) have spent your career arguing for the opposite point of view. That 81% rate hike is just the fruits of your labor.

hilzoy - You don't even have to go abroad to see lower overhead in action. The Medicare and the VA, after the reforms in the 90s, have come out nearly as good in terms of overhead and outcomes as other countries. Both have overhead rates under 3%, vs the average private insurers 14%.

I will second your point about insurance and pooling in general is a good one. Unless we want to do away with the concept of pooled risk, we have to live with the "insurance shielding one from costs" concept.

The only idea I have to make the current system "work" is that we as a society decide that conditions (life threatening or not) are treated based on one's financial ability to pay. If you can't afford preventative treatment and this causes a massively expensive problem to develop that you really, really can't afford, then you're out of luck. "Unhealthy" people would just suffer and/or die in that system, but that would solve the problem of overly expensive end of life care, right?

It's quite possible that some significant number of conservatives don't actually believe in insurance, the way other groups turn out not to really believe in something widely accepted by others, once they think it through. "Not believe in" in the sense of not actually regarding it as a good idea, I mean. It's just good to know that about oneself, and to be willing to say that and not carry on as though some internal modification might make it acceptable.

My only dispute with Hilzoy's post is that Derbyshire has been grousing about the Main Street/small town cost of free trade for some time now. He has taken on board a lot of the 'Crunchy Conservative' movement, especially their economic views. That may or may not affect his position on health care, but he is not by any stretch a hardcore libertarian.

Any health insurance system will protect the consumer from experiencing the costs of health care directly. That's the point of insurance.

Point, Hilzoy.

Much like the Laffer curve, it is theoretically possible that health care consumption is at a point where "more skin in the game" would lead to a 'better' solution (in the tax context, higher revenues from lowered taxes, in health care "more efficient" usage). But for all of Seb's posturing, he has presented no evidence that we are in such a situation.

Let me give Sebastion there a specific example of the way the US health care system screws us:

My father, three years ago, went to see his doctor about reoccurant arm pain. His doctor sent him to a specialist, who suspected a pinched nerve and recommended an MRI.

The MRI was declined by my father's insurance. (A rather large and respectable health insurance company). He was told that, rather than pay the MRI, they would pay for several months of physical therapy instead.

After several months of physical therapy, the condition had worsened, and his doctor again recommended an MRI.

I forget exactly what treatment was tried this time, but suffice it to say that it tacked on another three or four months.

My father finally got his MRI 14 months after it was first recommended. He surgery three weeks later to correct a bone spur that was pressing down on his spinal column, pinching nerves and causing the arm and hand pain.

Because of the year+ wait between the diagnosis of the pinched nerve and the confirmation via MRI and the resulting surgery, my father will never totally be free of the pain. Luckily for him, it's manageable. Had another year gone by, he might have lost total use of his arm.

Why did it take so long to get the MRI? Because the MRI itself was an expensive procedure (a few thousand dollars), and it almost certainly would have revealed a condition requiring major surgery (tens of thousands of dollars, all told). For the insurance company -- whose goal is profit, not giving quality health care -- it was better to pay for the far cheaper (and useless) physical therapy and wait. The odds were my father would have shifted to another health plan at the beginning of the next year (possibly out of anger that he wasn't getting treated) and thus some OTHER insurance company would be stuck with the bill.

For-profit insurance companies have no incentive to give quality health care. Their incentives are, in fact, to deny it. They seek -- quite reasonably -- to insure only the healthy, and then deny coverage when possible so that some other company gets stuck with the bill.

So when people talk about the "horrors" of single-payer or nationalionized health care, and express shock at the thought of "waiting for a hip transplant" -- I have to laugh.

We wait now. Only we don't get queued up in order of need, but merely stuck in line for as long as possible so that someone else pays for it.

We pay twice as much -- or more -- to offer worse coverage to fewer people.

End of life care is a reason that health care costs in general have risen. For every system -- not just ours. Yet ours remains the worst. Less coverage, more costs. Any type of health care system will have to address end of life costs. However, it is NOT an argument against single-payer health care, or natioinalized health care, or socialized medicine or whatever you want to call it.

It's a sign you don't understand the true issues at best, and a strawman at worst.

I'll bite on the U.S. culture question (not that this has anything to do with what Sebastian may have in mind). It seems to me that culture in the U.S. is extremely consumerist. Such that, when people smoke, they smoke alot; when people drink, they drink alot; if something is good for you, then 10X something must be even better; why eat french fries when I can have chili-cheese-gravy fries dipped in mayonaise? This kind of hyper-consumption is not really seen in, IMO, other english speaking cultures (other than perhaps the over-eating, which seems to take place moreso in Aus/NZ than England/Canada, at least in my experience).

The question is whether this sort of consumption will carry-over into socialized medicine*, i.e., I feel a little down and rush to the doctor because it's "free" - and whether people in the U.S. do this moreso than other nations (there will always be a certain number of hypochondriacs no matter the nation, I would think).

We are also a nation, I think, that is extremely susceptible to manipulation through fear (though not having spent more than four weeks at a time anywhere else, this may not be unique). The Iraq war is a case in point - Bush & Co. were able to invoke the spector of 9/11 to get people on board with what will likely turn out to be the worst foreign policy decision in the history of the nation. So, the scary bogeymen represented by government run healthcare will convince enough of the populace to support the status quo, assisted heavily by its current beneficiaries, such that any move in that direction won't occur for the foreseeable future (not to mention the fact that people will actively work to destroy such a system were it ever to be set up).

*If we ever move to national healthcare, people will have to get comfortable with this term as there will be massive resistence to such a system using it.

America may be unique in its healthcare attitudes, but no more unique than every other country. In Japan, for example, there is a "problem" in that prescription medications are (by many accounts) over prescribed. Some argue this is because they are "too cheap" (echoing Sebastian's fear). However, because of the overall system's cost controls and most peoples' limited interest in taking lots of unnecessary medication, this has not spiraled out of control a la pretty much every problem we have in our system.

To me what's most telling is the fact that the anti-national healthcare side offers mainly hypotheses (a la the Laffer curve) or fear-inspiring talking points ("SOCIALISM"), and when asked for concrete data, they point back to their hypotheses or scary commercials. The pro-national healthcare side side has 20+ years of research papers from many countries around the world, and several programs within the US, including several recent, comparable switchovers (see Taiwan in 1995).

PS. Taiwan didn't call it "socialized medicine". Just call it national health insurance. It's less about the care than it is the funding of the care.

PPS. One of things people always hold up as "bad" would you couldn't see the doctor you want under "socialized" medicine. But I fail to see how this would happen. In fact, I think the opposite would be the case. Every doctor would be on the same plan, and most doctors who stopped accepting insurance would start again if the overhead was low enough.

Morat, I don't think MRI availability really helps your case. In countries with more government controlled health care access (I'm avoiding 'socialized medicine' since we don't exactly what form it would take) MRIs tend to be less available for non-emergency procedures than here in the US. In fact one of the common talking points about expensive health care in the US is that we do too many expensive tests (and MRIs are high on that last) without sufficient cause.

Per capita, the US uses MRI and CT scans at ten times the rate of the country which uses them the second most often. cite.

If anyone can find a link to that original report rather than just the summary, I would love to read it.

The thing about "skin in the game" arguments is this: under almost any system of insurance that we might ever have (where "systems" include the total free market), most people who can afford to will have coverage for catastrophic care. But catastrophic care is where the real costs are. (That's why most people will insure against them.) So people will always choose not to be "exposed" to those costs if they can. And because of the nature of catastrophic costs, people who aren't insured against them will generally not have enough money to pay for them.

However, even though the vast majority of costs are incurred by a small number of people with catastrophic costs, there's a lot of money to be saved by preventing people from getting to the catastrophe stage in the first place. This, of course, means providing checkups so diseases can be caught early, and early treatment and/or management so that they don't progress to the "oh God we have to get to the hospital NOW!" stage.

This is precisely what "exposing people to costs" or "giving them skin in the game" will lead them to cut back on.

In fact one of the common talking points about expensive health care in the US is that we do too many expensive tests (and MRIs are high on that last) without sufficient cause.

Well, Morat's father certainly has enough skin in the game now. Good think we didn't perform unnecessary diagnostics.

To the extent that "unnecessary" is synonymous with "inconclusive" I don't think you have much of leg to stand on - the point of diagnostics is to see if there is anything wrong with you. That nothing might turn up is not the same thing as it being an unnecessary procedure...

You'd make a good politician, with a bit more practice. That was rather too obvious a way of saying that you didn't intend to answer.

st: Jes, how does the NHS deal with someone who is at the end of life, unavoidably dying, un-DNR'ed, and unable to express his/her wishes?

Depends. Sorry. There isn't any one answer. It would depend on so many factors that any list would undoubtedly overlook some, but as a basic minimum and in no particular order: is this person in any pain, how much pain is this person in, how far will treatment prolong their life, what does their next of kin say, why is this person unable to express their wishes, is their inability to express their wishes permanent, temporary, or of unknown duration, and what are the resources available for treatment. I have relatives and friends who work for the NHS, a close friend and an elderly relative died under the care of the NHS, and all I know is that there is no one "NHS solution" to any terminal case. (My close friend died in hospital, in an intensive care unit, after several years living with HIV and then AIDS: my elderly relative died as she had hoped to die, at home, five years after a heart attack that could have killed her but intensive and immediate care saved her life at the time, and ongoing care and careful balancing of drugs kept her alive for years.)

That is because the market has become so ridiculously deformed by the employment/insurance link and by constant government tinkering.

ha!

alternatively,

SH, your views on the marketplace for health care insurance are about as informed as your views on the market for water in the west, to wit: either you insist on remaining grossly uninformed despite the best efforts of knowledgeable people to pass on their knowledge, or you use the word "market" in a way that nobody else does.

since you show the occasional signs of being educable, I'll stick with the second premise and ask you to please define what you mean by "market".

because, from where i'm sitting, even though both water and health insurance are bought and sold in California, neither transaction occurs in an environment remotely recognizable as a "market" as such term is used in Econ 101.

here's one important "market" distortion: despite the best efforts of libertarians across the blogosphere, there are no signs that any government, be it federal, state or local, intend to refuse emergency room care to those who medically need it.

hmm, re-reading my post, perhaps I'm being too harsh. you may, in fact, be precisely correct that "government tinkering", also known as "emergency rooms", are grossly distorting the pricing of insurance.

damn those liberals! if only people were forced to bear the true costs of their poor decision-making.

(of course, the extreme poor may choose to, say, eat, rather than pay for health insurance, so it looks like we'll have to still build some dying wards for those who gambled on not buying insurance and lost -- but they're bound to be cheaper than ERs.)

Sebastian does have a point when he talks about end-of-life care. I'd actually expand on it and bring up another budget-buster: long-term disability care, for people who can no longer take care of themselves but aren't quite ready for the nursing home. There are insurance policies available for that, "long term care" policies, which pay for a limited number of years' coverage based on a daily benefit amount. (For example, you pay about $200/month premium for a coverage of 4 years at $100/day, to pay for things like home healthcare, assisted living facilities, and so on.)

There's no denying that Westerners are now living long enough for our vital systems (esp. neurological) to collapse, leaving us alive but unable to take care of ourselves. Acute conditions that used to kill us off fairly quickly - heart disease, cancer - tend not to anymore. And chronic conditions that used to kill people long before they reached their 3-score-and-10 are now treatable - expensively treatable, because the treatment lasts decades, and often routinely involves things that used to be rare, like organ transplants.

I don't disagree one tiny bit that other industrialized countries have healthcare systems much better than ours. I don't disagree one tiny bit with the push for more socialized medicine.

But it would be good, useful - even necessary - to know how those countries we want to model our healthcare system on deal with long-term care needs. Esp. since, once you need long-term care, you're rarely going to stop needing it, so we're talking about 10-20 years of very expensive care for a greying population of hundreds of millions of people.

One of the "best" US health insurance companies spent a year denying my father an MRI. Not because they didn't have enough MRIs, not because MRIs were actually too expensive, not because there was a line for the MRI machine.

Because they were afraid the MRI would reveal something that would require expensive treatment.

In the end, my father got the MRI. Got the expensive surgery. In addition, there was six months of physical therapy, and god knows how much in useless costs because the insurance company was putting off fixing the problem, hoping someone else would pay for it.

It's a very clear example of how an insurance company wasted money hoping someone else would end up with the tab.

The VA pays for preventative care. Canada's system will pay for an expensive surgery that fixes a problem, rather than shell out for the less-expensive option that merely postpones the inevietable fix.

In the end, my father had to wait far longer for his MRI than even the most jaded "MRI horror story" about Canadian health care. Not because the doctors felt he didn't need one. Not because there were other patients with a more critical need.

No, he was denied the MRI becaues his insurance company was quite sure he needed one.

You don't seem to want to acknowledge simple facts about health care. That every other first world country manages to insure EVERYONE, for half the price -- and somehow manages to have better health than we do.

Doesn't that make you think SOMETHING is wrong? I mean, if America is spending twice as much to treat fewer people, who end up living lives that aren't even as healthy as those darn socialized medical programs -- doesn't that make you think something's wrong somewhere?

As usual when I see one of these stories about medical insurance in the US my imagination boggles. Mr. Derbyshire's insurance will now be US$10,284 per annum. He doesn't say if that will cover his family (perhaps an extended family?) but still. That's about what I, a self-employed primary breadwinner for a family of 5 and earning a very reasonable living, pay in total taxes! And somehow roads get built, the schools function etc. etc. along with the hospitals and doctors. It's magic I tell you!

There are two fundamental incentives faced by health insurance firms in the market that tend not to be squarely faced up to by those Americans who wish to continue with their current system:
1. The incentive to delay and/or deny needed treatment as a carefully calculated means of improving the bottom line overall. (See Morat20 for a clear cut example).
2. The very strong incentive to make it as complex and onerous as possible for doctors, hospitals etc. to actually collect the agreed upon fees and charges. Just make sure your paperwork is different from everyone elses, make it endlessly complex, riddle the billing system with traps that allow you to refuse payment if every single t is not crossed etc.

No wonder the US system gobbles up disproportionately much more than any other in overhead and administration. What a waste.

How much thought does it take to realize we already have a 2 payer system? The privately insured and Govt insured pay all the costs ( minus the little bit of out of pocket uninsured & under insured can come up with ). So, other than Govt programs we have a single payer system, just an incredibly bastardized inefficient one.

Sebastianwe have a different culture from anywhere in the rest of the world

Wow. I mean, WOW.

Does this mean anything beyond the truistic "Every culture is unique"?

Did you somehow interpret my statement as an endorsement of that aspect of American culture?

No, actually. What Jes said - I genuinely didn't understand what you meant by "a different culture."

Now I do, thanks. ("The key problem for a US health care system (private or public) is that we absolutely, definitley, do not want to ration end of life care.") I'm not at all sure that I agree with your assertion, but at least I now know what it is, which is definitely an improvement.

Do you disagree that Americans (on average) have a much less healthy approach toward the end-of-life experience than many [?]

I honestly don't know. I'm no expert on "American Studies" as such; though I'm an American, I've spent more than 20 years living overseas - mostly in Asia, not in Europe, where I would suspect the most useful comparisons might be found. And even when I lived in England and Australia, I can't say I paid particular attention to their "culture of death."

I remain skeptical of your proposition for two reasons, however:

1) Most Americans are descended within the last few generations from Europeans (or Asians or Africans). I wouldn't think a "culture" in a meaningful sense - as opposed to a temporal trend - would mutate all that much in that time, so that Americans would be so much different from their ancestors or distant cousins.
Or IF such mutation had occurred, it might be due to relatively recent historical processes and actors - e.g., the funeral industry? the insurance companies? - and thus, presumably, open to the possibility of being reversed or mitigated in some way. It was in 1963 that Jessica Mitford first published The American Way of Death, later revised , which was the first time most people had taken a serious look at the possibility that Americans deal with death differently from others (specifically the Brits, IIRC). But I haven't read that in decades, much less kept up on new developments in American "culture," so I can't say further for now.

2) Like many others above, I fail to see how the admitted difficulty of dealing with "end of life" concerns presents an insurmountable obstacle to a system of national health insurance or such. There are, of course, a myriad of problems facing the introduction of any highly complex system (the military, the Internet, AIDS care for Africa, the BCS playoffs), but I have always assumed that with good will and intelligence, people had a reasonable chance of surmounting (or sliding around) most of them. I just can't see saying "Well, that scuppers the whole enterprise, we might as well give up!," which appeared to be your point.

But maybe I'm wrong. As I hope I indicated, this is not at all my field of expertise.

i love how theoretical nuances are enough to stop people from seriously considering a national health care system - despite evidence that such things work fine in other countries, and despite the fact that the system we have now is so absurd that if the situation were reversed, it would be satire to suggest a system like we have now.

The question of end of life care is one that hasn't come up, I don't think, but I think it is just a symptom of a larger problem. While I can't precisely define it, I would include the feeling that western medical science can always save the day, that doctors would only make mistakes if they are incompetent, and that a pill can provide a cure for a condition in a way that is better that (or at least equivalent to) actually avoiding the problem in the first place. I'm not sure how the US gets back to a situation where malpractice costs are not running away, or where people demand/are forced to demand that every life saving measure be taken, regardless of the quality of life that results, but I think that is the sand in the gears that is preventing a move towards a national health care system.

LJ, malpractice costs aren't running away. Kevin Drum's documented this at Washington Monthly. There's a cycle of premiums rising quickly and then settling down again, and what it really keys to is insurance companies' investments. They jack up rates in years that their portfolios don't do well. The payments required by malpractice suits and the costs of trying those suits are well under control. It's another lie from the people who also want you to believe that Social Security's about to run out of money.

Lots of people wouldn't be willing to just let grandma die if they could keep her alive just a few more weeks.

A couple of things about this:

a) Most national health services have private systems over the top - the UK, Australia, Canada I believe. If people want to keep people alive the few more weeks, they can pay for themselves, just like in the US. And people who can't pay? They're still in a slightly better position than some of the uninsured in the US, from what I've heard. Aren't there laws in Texas allowing the state to pull the plug if the bills can't be paid?

b) My experience was the opposite to yours. My mother's biggest nightmare was slowly slipping away over weeks, and thankfully her death (from cancer) was quick. I didn't get to get home in time to see her, but if we'd had the option of keeping her alive until I did, both my dad and myself would have refused. I have trouble believing that Americans are any different from people in general in respecting the final wishes of a person near death.

Shinobi, what I observed at Dad's hospice was that people think very different about impending death when it really is impending. In the abstract, we tend to imagine more cinematic endings, with alertness and wan glamour and all that. The more complicated, less pleasant realities put death in a different light.

I've heard that from you before, Sebastian, and I don't believe it now either. So you believe that us socialists in Sweden, Denmark, France etc. are more cynical when it comes to letting people die when they are expensive to keep alive. Have you any evidence to back this up?

The problem with individual health insurance is hubris, or "bullshit" as I believe one american philosopher termed it. In a perfect world, you could count on people to say, "OK, I don't have any inheritable diseases, how fortunate, but it's just luck, really. I'm willing to chip in on paying for the treatment of those who have - I would have wanted them to do the same for me, after all." However, in the real world, people, and especially conservatives, make all sorts of excuses to convince themselves that they wouldn't. For instance, they may have an exagreggated belief in the importance of their own decisions on their health. If they smoke, they may instead go for the excuse that most of the people on welfare are really just lazy bums cheating the system, and so on. Everyone finds an excuse to suit themselves, to escape the demand of the golden rule.

What you apparently don't see is that this is a classic market failure, arguably the only market failure there is, namely that people aren't paying for what they get, but instead get someone else to pay (or carry the burden). What they are paying for is a certain form of option. Once they see that they don't have to use the option, they engage in hubris (or bullshit, if you will) and convince themselves that they didn't need the option in the first place. The system unfortunately lets them get away with this. But they are in fact free-riding on the people who happen to have an inheritable illness, or other medical condition they can't help.

Not here. If someone says they don't want the option to get medicine when they are ill, we call them on their bullshit and say "We don't believe you. You still got to pay for it. Vote in another political system if you don't like it."

And that is an excellent solution to the free rider problem of health insurance. It may not be a very polite and nice solution, but it works, unlike what you have over there.

I agree with everyone who has said: a single-payer/single-insurer system could cover some set of basics, and private insurance could pick up the slack. That's one way to deal with at least part of the end-of-life care issues.

One other problem is this: if a family member or spouse or other loved one is too sick to make her wishes known, and you don't know what they are, it's easier for a lot of people to say, in the face of doubt: do everything you can, than to say: make sure she dies a comfortable and peaceful death. Even when 'everything' is painful or horrible, and really at odds with the comfort of the dying person, and even if there's really no chance that the person will actually survive, as opposed to being kept alive a bit longer, not "doing whatever you can" feels like giving up.

One possible way of dealing with this would be to really, really try to make sure that as many people as possible have made it clear what they would like to have done in such circumstances. It's hard to figure out how much of "doing whatever you can" we should decline to pay for for someone who wants it, but surely if someone doesn't want everything to be done, but would rather, at a certain point, die in peace, it would be better just to know that.

Not sure what you mean Bruce - I was just chronicling my practical experience of the event. I'm not sure how my experience fits in with the general experience, but the only way to determine whether Seb is right or not is to get some data.

"The key problem for a US health care system (private or public) is that we absolutely, definitley, do not want to ration end of life care. Those last two or three weeks of costs are economically very noticeable. My grandmother probably had spent on her last two weeks of life more money than she earned throughout the entire previous years."

That's a popular opinion, but it's worth thinking about whether it's completely true. In particular: what were the _marginal_ costs of the care your grandmother received? That is, how much of these were new costs to the system vs how much were overhead costs inherent in the system which were now allocated to your grandmother?

This is important because a lot of what goes on in the current health insurance system is cost shifting. If you think about it, there are fairly high fixed costs involved in having a good quality, responsive, health care system. For example, an emergency room has to be paid for whether it's used or not. But when someone actually uses it they get charged a rate based on the overhead cost, not the marginal cost. Those who don't use it don't get charged, but they benefit from having it available in case they need it. Similar points can be made about any aspect of the system.

Where this interacts with the health insurance industry (including Medicare/Medicaid) is that there is a tension between the providers and the payers. The payers continually try to cut how much they are have to spend, by attacking the marginal cost. The providers need to pay the overhead and keep trying to do so by tacking on (what seem to be) outrageous charges.

To make a long story short, the end result is that costs aren't really contained, they are simply squeezed down to the point which has the least leverage. That ends up being either the uninsured, the state uninsured pool, or it goes to the provider's "charity pool", which cycles back into their overhead cost ad infinitum.

And there are a lot of inefficiencies involved in the cost shifting. What's the effect on costs of having a whole professional specialization of "medical coders"?

One advantage of single payer is that it can recognize that the overhead exists, because there is no advantage from trying to shift it onto someone else.

So, to bring things back around: end of life costs are important if they either have high marginal cost, or if there are significant portions of the medical system overhead which would not be present if we threw the dying folk out on the ice flows. But without real analysis they may also be a red herring.

"So you believe that us socialists in Sweden, Denmark, France etc. are more cynical when it comes to letting people die when they are expensive to keep alive. "

See you are taking my statement on culture as if I liked this facet of American culture. No, I think that people in Sweden, Denmark, France etc. are more realistic about letting people die when medical technology isn't going to really do much for them.

Hilzoy - One possible way of dealing with this would be to really, really try to make sure that as many people as possible have made it clear what they would like to have done in such circumstances.

I've got an idea. Since we're talking about single payer national healthcare with a single set of government regulations to deal with, how about the government mandate that anyone over 18 fill out a basic advanced healthcare directive + durable power of attorney.

If we can successfully mandate drivers licenses, signing up for the selective service and a host of other things, this shouldn't be to hard.

Make it a form similar to the one hospitals give out as an option to terminal patients that outlines the basic set of "options" and your choices for each. If you want to have your own more nuanced health care directive you can go get one made up by a lawyer.

Come to think of it, there are countless forms we sign when signing up for health insurance already. How hard would it be to add this: "Do you have an advanced healthcare directive? If yes, please provide a copy/link/proof/whatever. If not, please fill out Attachment B"

The fact is that this, and many other issues that are "complicated" because of our current patchwork system, would likely be brought into stark relief and solved fairly simply if there were a single national insurance company.

So yes, not all Americans deal with death particularly well and knowing 'when' to stop providing medical treatment is not always cut and dry. It's just completely not obvious how this fact precludes nationalized health insurance from providing universal coverage for less cost with the same or higher quality outcomes, thus solving a huge host of our current system's problems.

So far all Sebastian has offered is the assertion that people would "demand" more end-of-life care be provided because the "government" is providing it. Hilzoy already pointed out there is not a universal demand for unlimited medical intervention at the end of life, and others have pointed out that it wouldn't be any worse than the demands people already make under the existing insurance system.

Hi Bruce,
I didn't mean to make the argument that malpractice is bankrupting the system, but to point at that deteriorating relationship (which regardless of the money involved, is deteriorating) is putting a stress on the system, and is a symptom of the larger problem, which is the relationship Americans have with the medical infrastructure.

Oh, sure, LJ, I agree with that, it's just that the strains are (I think the record suggests) caused in large measure by corporate lies and people's sense that they're being lied to, seeing a gap between asserted realities and their own experience.

Not only do I have zero sympathy for Derbyshire, I actually take great joy when conservative politicians or pundits or blog authors who find themselves hosed by the American healthcare system. It is they who continue to poison the debate about national healthcare and prevent solutions proven to work everywhere they are tried from being enacted. Posted by jcricket

What jcricket said. My husband is fighting pneumonia at $25 an antibiotic pill right now because we're uninsured and have to pay cash. If he has to go into the hospital we'll run a real risk of ending up homeless as well. No doubt the Derb, until his own personal wallet felt the bite, would have suggested that my husband not do anything as fiscally irresponsible as go to a doctor when he got a life-threatening disease.

Sebastian: In Texas they remove airtubes from someone with cancer because the bill can't be paid. In the Netherlands they prosecute a doctor who (at the request of the caretaking daugher) injectes an old dying comatose woman with too much morphine, to make her die a few hours earlier (he was found guilty but not sent to jail - and I think he filed an appeal).

Your grandmother with alzheimer, in absence of a DNR, would be treated as long as there was something to treat. The decision to keep her alive is not made on a financial basis.

Where she might suffer from rationing in our system, is in the level of care if she was in a home. Unfortunately the number of nurses is not always adequate, leaving the nurses not a lot of time for extra care.
She might also suffer from rationing if she wanted a complicated operation and the hospital wouldn't have budget for it. But she would be allowed to go to another European country and get the treatment (some insurance companies only pay the Dutch price, most pay for the whole treatment), or go private anywhere in the world.

We had a slight increase, so coming year we pay 263 euro a month for two adults and three children. Just the obligatory basic insurance (only prescription medication, doctors and hospital for free) would be approximately 200 euro, but we have additional insurance. These days insurance companies are not allowed to refuse you for pre-existing conditions and most give you free choice of doctors/hospitals/specialists.